...
(v) the possibility of stultification is a "powerful" factor to be taken into account by the Court in exercising its discretion as to whether an order is appropriate: Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542. However, Clarke J in Yandil observed that the fact that a plaintiff is financially unable to provide security does not lead to the inevitable conclusion that the making of the order will stultify the plaintiff's claim nor does it lead to the automatic refusal of an order (at [50]).
24 In considering the foregoing principles, I note from the evidence that the applicant has not complied with orders of the Court in relation to costs and it appears the reason for this is because the applicant simply does not have the financial resources to do so other than by payment by instalments. Further, a property search by the respondents could not identify any real property held by the applicant within the jurisdiction.
25 In relation to the application for security having been brought promptly, it was not. The costs order was made in April 2007 and was effective in May 2007. The respondents conceded there was delay in bringing the application. However, I do not consider much turns on the question of delay.
26 There was no evidence that the applicant's apparently strained financial circumstances were caused by the respondents' conduct which is the subject of the claim and no evidence that the respondents' application for security is oppressive, in the sense that it is being used merely to deny the applicant a right to litigate.
27 As matters presently stand the applicant's claim is, prima facie, regular on its face and discloses a cause of action. As it was said in Idoport, in the absence of evidence to the contrary, the Court should proceed on the basis that the claim is bona fide with a reasonable prospect of success.
28 There is a distinct possibility that the applicant's claim will be stultified if an order for security is made. This is a powerful factor to be taken into account by the Court in exercising its discretion. On the other hand, McHugh J has warned in Oshlack v Richmond River Council (1998) 193 CLR 72 at 97 that to the extent it can be avoided, the court should not permit a situation to arise where a party's success is pyrrhic.
29 Nonetheless, the mere fact that the plaintiff is impecunious does not provide a gateway into security for costs: Idoport at [53]. And given the requirement for exceptional circumstances where an order is sought against a natural person, which are not present here, the balance falls in favour of not granting the respondents' order. I note counsel for the respondents' reliance on Johnson and Rajski. In Johnson, although part of the rationale in that case for granting an order for security of costs was that there were outstanding costs orders, it was also the case that the plaintiff was receiving financial assistance from "a syndicate of people". In Rajski, the corporate plaintiff was and had been managed by the personal plaintiff so as to be denuded of all assets before the litigation commenced and where Holland J considered that an order for security of costs was not likely to stultify the proceedings. The two cases are, therefore, distinguishable. I do not propose to make orders against the applicant for security for costs.
Creation of a fund
30 I turn to the applicant's motion. The applicant seeks orders for the creation of a fund of money. The applicant made no submissions in support of her claim regarding the creation of a fund and consequently there was no explanation of the basis upon which the Court could or would make orders of the nature sought. Moreover, there was no evidence that the respondents would be unable to meet any order of the Court in these proceedings. I intend to refuse orders 1 and 2 sought in the applicant's notice of motion.
Payment of outstanding costs
31 The applicant next sought orders enabling her to pay the outstanding costs orders by instalments at the rate of $3,009.00 per month. This Court does not have jurisdiction to vary the orders of the Supreme Court nor to act, in effect, as an appellate court in respect of the orders made by Backman J or the Supreme Court. Order 3 in the applicant's notice of motion will be refused.
Costs
32 The last matter for determination is the question of costs. The respondents seek their costs of the motion. The applicant contended that given the respondents had raised as a defence the issue of whether the applicant's employment was subject to federal award coverage, costs may not be ordered except in the circumstances that arise in s 824 of the Workplace Relations Act 1996 (Cth). Reliance was placed on Goldman Sachs J B Were Services Pty Limited v Nikolich [2007] FCAFC 120 per Black CJ at [86].
33 Section 824 of the Workplace Relations Act provides:
824 Costs only where proceeding instituted vexatiously etc.
(1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) must not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.
(2) Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first-mentioned party to pay some or all of those costs.
(3) In subsections (1) and (2):
Costs includes all legal and professional costs and disbursements and expenses of witnesses.
34 As Kiefel J observed in Tristar Steering and Suspension Australia Limited v Industrial Relations Commission of New South Wales (No. 2) [2007] FCAFC 95 in relation to s 824:
The test for determining whether a proceeding is a matter arising under the Act, for the purposes of the section, is 'whether the right or duty that is sought to be enforced owes its existence to a provision of the Act': Re McJannet; Ex parte Australian Workers' Union of Employees (Q) [No 2] (1997) 189 CLR 654 at 656.
35 This Court's power to award costs is governed by s 181 of the Industrial Relations Act and the relevant Rules: see Pt 27 of the Industrial Relations Commission Rules 1996. Section 181(1) of that Act provides:
(1) Subject to the rules of the Commission and any other Act or law:
(a) the Commission may award costs, and
(b) costs are in the discretion of the Commission, and
(c) the Commission may determine by whom and to what extent costs are to be paid, and
(d) the Commission may order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis.
36 The term "Act or law" is to be interpreted to mean a State Act or law and not a Commonwealth Act (see s 65 and s 67(2) of the Interpretation Act 1987 (NSW)). It would seem, however (notwithstanding that notices under s 78B of the Judiciary Act 1903 (Cth) had not been issued), that the applicant contends there is an inconsistency between s 824 of the Workplace Relations Act and s 181 of the Industrial Relations Act and that by virtue of s 109 of the Constitution, s 824 prevails to the extent of the inconsistency.
37 The respondents' answer to this is that they are not relying upon a defence or a matter arising under the Workplace Relations Act (see National Union of Workers and Another v Davids Distribution Pty Ltd (1999) 91 FCR 513 at [20]-[21], which was relied upon by the applicant) but rather s 109 of the Constitution. Consequently, it was submitted, s 824 of the Workplace Relations Act does not prevent an order of costs being made in circumstances where the defence is based upon s 109 of the Constitution concerning the Commission's lack of jurisdiction: see Tristar Steering and Suspension Australia Limited v Industrial Relations Commission of New South Wales (No. 2) [2007] FCAFC 95 Kiefel J at [2]; Gyles J at [4] and Buchanan J at [7-16].
38 The respondents' contention in the substantive proceedings is to be that the applicant's employment was subject to the coverage of a federal award (either the Hotel Managerial Staff (Federal) Award 1974 or the Hospitality Industry - Accommodation, Hotels Resorts and Gaming Award 1995) and, therefore, by virtue of s 109 of the Constitution, the Court has no jurisdiction to determine the applicant's claims: Hansen Yuncken Pty Ltd v Costopoulos (2004) 136 IR 61 and Everitt v Cuscal Shared Services Pty Ltd and anor [2005] NSWIRComm 319.
39 In Tristar (No 2), Buchanan J observed at [16]:
[16] In my view, it cannot correctly be maintained that the relief which was granted by the orders earlier made in the present matter was a vindication of a right or duty conferred or created by the WR Act. Rather the right or duty (if that is the correct way to regard the absence of jurisdiction in the IRC) arose from the operation of s 109 of the Constitution . The proceedings were brought to enforce the duty upon the IRC not to act outside its jurisdiction, in circumstances where the IRC had made plain its intention to do so. The fact that s109 of the Constitution was engaged by reason of the terms of the WR Act does not signify, in my view, that the proceedings were 'in a matter arising under' the WR Act within the meaning of s 824 of the WR Act. In my view the Court has power to make an order for costs in the proceedings.
40 In the present case, the respondents are engaging s 109 by reason of the terms of the Workplace Relations Act, which provides for the making of federal awards, such federal awards prevailing over any inconsistent State law by virtue of s 109 of the Constitution. The respondents' defence, based as it is on the existence of a federal award, does not arise under the Workplace Relations Act but rather as a consequence of the Constitution. Accordingly, the Court has power to make an order for costs in the proceedings.
41 The Court may exercise its power as to costs "at any stage of the proceedings or after the conclusion of the proceedings" (r 203(1) of the Industrial Relations Commission Rules) and may require that the costs the subject of an order for costs be "paid forthwith notwithstanding that the proceedings are not concluded": r 203(2) of the Rules. The circumstances in which a cost order may be made prior to the final order for costs were considered by the Full Bench in Surfing Hardware International Holdings Pty Limited and Ors v William McCausland and Anor (No 6) [2007] NSWIRComm 285 particularly at [50] - [51]. As it was noted at [50], one circumstance in which a cost order may be made prior to the final order for costs is where a question in the proceedings has been separately determined, no issue in the trial of the balance of the proceedings overlaps with the question in the separate determination and no issue in the trial of the balance of the proceedings can cast doubt on the correctness of an order for costs. It was further noted, however, at [51] that a guiding factor is whether the "demands of justice" (or the "interests of justice") support the making of costs order prior to the final order for costs.
42 It is apparent on the evidence in the proceedings that the applicant is finding it difficult to comply with the already outstanding costs orders that have been made against her. Additional costs orders at this stage would most likely prolong the period of the stay I propose to grant. Given that it is open to the Court to reserve the costs of the motions and for any costs to be included in the final order for costs unless the Court "otherwise orders" (r 210), in my discretion that is what I propose to do in this case.
Orders
43 The Court makes the following orders:
(1) In relation to the applicant's motion:
(a) Orders 1, 2, 3, 4 and 5 are refused.
(b) Costs are reserved.
(2) In relation to the respondents' motion:
(a) Orders 1, 2, 4, 5, 6, 7 and 8 are refused.
(b) The proceedings are stayed until the applicant complies with the orders of Backman J of 21 September 2006 and the New South Wales Supreme Court in proceedings 11824/2007.
(c) Costs are reserved.
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